What are Perpetual Futures?

Perpetual Futures, what are they? And how do they work?

Perpetual Futures are a type of derivative, a derivative is an asset that derives its value from an underlying asset or a group of assets. A futures contract is a very specific type of derivative between two or more parties to buy or sell a particular commodity asset, or security at a predetermined price at a specified time in the future.

Perpetual Futures

A perpetual futures contract is a different type of futures product, a perpetual futures contract does not have any expiry date. You can hodl a position for a long as your diamond hands will let you as long as you’re not liquidated. While you’re holding a perpetual futures position, you may be required to pay a funding rate.

Perpetual Futures pricing

Perpetual Futures prices are based on the index price (average across all markets), the trading very closely matches the spot price of the asset, though the price may differ in certain volatile market conditions. It’s important to note that futures contracts are just that: contracts. They’re cash-settled, without any exchange of the asset itself.

For more details on Futures Trading contracts please follow the link